Resignations are Down, But Keep Talent Retention a High Priority

The pace of resignations has slowed, with 2024 survey data from The Adecco Group showing that 83% of workers plan to stay with their current employer. On the face of it, this looks like great news for talent retention.

When employee retention is healthy and they’re not at risk of losing their leading talents, it’s easier for organisations to plan more effectively. But research also shows this shift in workers’ sentiment is fragile, driven more by a sense of ‘better the devil you know’ than by any newfound optimism about their employers or enthusiasm for their current roles.

Meanwhile, hiring and recruiting remains subdued in many industries. The September 2024 edition of LinkedIn’s Workforce Report shows a 9.5% year-on-year decline in hiring across the United States and recorded hiring declines in 17 of the 20 monitored sectors.

At the same time, layoffs continue across the economy, with the tech sector hit especially hard (some reports say the sector has shed 124,000 workers this year alone). Layoffs haven’t been restricted to tech, though: Each of the “big four” consulting firms has announced layoffs during 2023 and 2024.

This has led to more talent on the market than usual, with more applications for each role and fierce competition. This makes workers reluctant to move, as they’re fearful of the tricky recruitment landscape, but fear is never a solid foundation for talent retention.

This means that if employers neglect talent retention, they risk unwanted, potentially critical surprises down the line. Instead, organisations should redouble and refocus their retention efforts to connect them to workers’ specific needs. But what are those needs, and how can leaders be ready to address them?

Employees Seek Stability

Though workers are staying in place for now, it’s because they feel external factors are preventing them from considering a move. More than half (52%) of workers said that factors such as the economic climate (23%) and limited opportunities within their own industries (20%) were holding them back from leaving their current roles, while 51% cited a “fear of the unknown.”

This uneasiness was even greater in industries experiencing greater disruption from digitalisation, automation, and AI, including marketing (57%), finance (57%), accounting (56%), and IT (56%).

LHH’s research suggests workers have good grounds for feeling uneasy. LHH’s Outplacement and Career Transition 2024 Trends Report found that 73% of organisations are considering or undertaking layoffs.

For these workers, stability and certainty are the priority, and they’re looking to their employers to help reassure them through upskilling and career advancement opportunities. This research found that employers’ retention strategies are being reinvented to more consistently meet these needs, putting career progression and professional development centre stage.

This new approach is likely to be crucial to retention in the coming years, as it directly addresses a major driver of attrition. In fact, of the 51% of participants in the study cited in The Great Potential who said they are staying in their jobs are doing so under the condition of career progression and upskilling:

• 50% say that their employer is responsible for helping them understand the changing nature of jobs
• 42% say that companies are responsible for making sure their skills are relevant for the future

Leaders Have an Opportunity to Boost Talent Retention and Attract “Passive Candidates”

Top talent is always a flight risk, so leaders should not take team members’ desire for stability for granted. It’s not that they lack confidence in themselves at all: 61% are confident their skills are transferable to other industries. They’re essentially ‘biding their time,’ as 86% said that if they left their current jobs, they’re confident they could find a new job within six months.

Not only are workers confident in their skills, they’re also open to new opportunities—especially those that empower them with skills development—even if they’re not actively chasing them right now. The truth is, we discovered a significant “passive talent pool” who are open to opportunities if it means learning new skills:

• 47% of workers are at least looking at open roles.
• 33% think about their career plans daily or weekly.
• 72% contemplate their future plans—such as their next job, reskilling, and upskilling—no less than quarterly.

This presents an opportunity for employers to both retain top performers and tap into that “passive” pool of talent by ramping up their upskilling, training, and career development efforts.

Become an Employer of Choice by Investing in Employees

It might seem trite to point out that investing in your employees is the most powerful retention tool at your disposal, but it’s worth saying anyway—not least because what that means varies so much between organisations and sectors.

For example, not all employers are able to address the desire for higher pay and flexible working, even though they’re the two most common reasons for staying in a job (LHH’s Outplacement and Career Mobility 2024 Trends Report).

But among their top five reasons for staying in current roles, workers value a culture that supports their need for growth and progress. This is something all employers are able to address—with the right strategy.

Where to begin? Well, the obvious area is upskilling employees in areas of digital adaptability. As AI and machine learning continue to automate routine tasks, today’s employees are willing to embrace technology in their current roles—and, of course, in their next ones.

In LHH’s latest Workforce Trends report, 65% of surveyed employees told us digitalisation will have a positive impact on their jobs.

Even employees without hard technical skills in areas such as computer science or data analysis may upskill to work well with evolving technologies.

There are employees ready to accelerate your digital transformation more than others. To start, identify talent with soft skills such as:

• Adaptability
• Creativity
• Critical thinking
• Problem-solving
• Good verbal and written communication abilities

These employees have solid foundational qualities ready to learn and apply emerging technical skills. So, seize the opportunity!

Keep Employees Engaged Through Regular & Productive Career Conversations

While employee development is critical to your retention efforts, these days it’s rarely linear. With constant changes to roles and responsibilities driven by disruptive technological advancements, today’s career paths are anything but traditional or straightforward.

Ensure your employees feel a sense of constant growth with a culture that encourages regular coaching and productive career conversations.

Career development in action—how assessments help

To make the most of the power of learning and development to enhance retention, it’s not enough to simply offer a range of training options. Workers need support in identifying the skills they have, as well as the skills they will need as the future unfolds.

Asking people (and their managers) to identify their own skills is an important step, but it should be only one part of the process. A more thorough, empirical assessment helps your people develop an unbiased view of their strengths, their potential, and the transferability of their skills.

That’s not to diminish the role of managers. It’s still vital to have regular, empathetic, yet candid conversations with employees on which skills they need to improve and learn to grow in their current role or transfer to a new one. These conversations will be most effective when they are backed by the insights from assessments.

Additionally, employees need reassurance from managers and business leaders that their willingness to adapt is not only appreciated, but essential to achieving the organisation’s vision.

LHH Global Account Director Gavin Donaldson agrees but takes it further. “I think it’s incumbent on Learning & Development and Human Resources teams to create unity between the strategy, leadership, and employees. It’s vital for anyone in people or leadership development roles to know, but more importantly, direct such activity based on the company’s direction.”

Related: LHH’s Diagnostics and Assessments team uses talent mapping, worker readiness, and more to identify high-potential employees and drive strategy execution.

Great Career Conversations: What a Talent Retention Strategy Looks Like in Practice

At LHH, we support thousands of leaders to understand what makes them do what they do. But only a subset of leaders has the behavioural traits to have great career conversations. LHH research has found which traits make a difference and how many leaders are actively employing them.

Over the last year (from July 2023 to July 2024), we assessed 3,775 leaders worldwide. Our research and analysis focused on behavioural preferences, so it’s important to note our data doesn’t tell us what leaders are good or bad at, but rather their preferred behaviours in a range of situations. We found leaders most successful in this area demonstrated empathy, trust, calmness, and caring.

Only 25% of leaders demonstrate a high preference for empathy

The positive impact of leaders with empathy is already well known, including their role in boosting retention. In short, talents value leaders who understand them thoroughly and are mindful of how each person’s unique individuality contributes to the organisation.

An empathic leadership style helps establish that leaders and workers are on the same side, with each other’s best interests at heart. In turn, these helps create career conversations where both parties are committed to improvement, without blame or defensiveness.

43% have a moderate or low preference for demonstrating trust

Trust partly emerges from empathy but must be tended to as it acts as the foundation for leaders to coach their teams. A low level of trust means missing opportunities to build authentic relationships with team members, which in turn means leaders will be in the dark about their top talents’ plans to leave.

While trust is sometimes hard to define and is often a two-way street, David Hornsager’s work on the subject does a great job. In addition to the 8 Pillars of Trust, he says “trust affects all aspects of business. If a leader is untrusted, customer and employee satisfaction fall. If a brand is trusted, revenue and employee retention increases. In both situations, trust is the first thing that changes.”

49% show only a low or moderate preference for calmness

The importance of calmness varies depending on the organisation’s purpose and its culture, but in broad terms, calmness fosters more open communication (especially in tough times). A calm demeanour makes a leader more accessible, which may raise leaders’ awareness of attrition risks earlier.

More positively, 67% of leaders demonstrate a moderate to high preference for being caring

This research shows leaders are unafraid of connecting with their team not just as co-workers, but as people. This is a vital first step to establishing greater trust and empathy and helps foster a spirit of supportiveness.

“Overall,” says LHH Head of Assessments Solutions Rob Read, “Our research suggests that around one-half of leaders currently do not express key behavioural preferences we’ve identified as supporting relationship development and retention.

Ideally, organisations should respond in two ways simultaneously. Actively encouraging these retention-supporting behaviours among leaders is the longer-term solution.

More immediately, organisations can promote leaders exhibiting these traits to their most business-critical functions.”

Conclusion: To Get Commitment, Show Commitment

As the “Great Resignation” fades into memory, some employers might think their talent retention issues will resolve themselves. This would be a mistake. Employees’ willingness to stay put is soft and conditional.

One highly effective way to solidify your top talents’ commitment to the organisation is by demonstrating your own commitment to their futures. Of all the retention levers at employers’ disposal, this is arguably the one over which they have the most direct, immediate control.

In practice, this means regular career conversations supporting team members by empathic leaders they trust. These conversations will, naturally, cover their current performance, but given the growing role of skills development in people’s career plans, skills must be a focus too.

Putting skills at the heart of your retention strategies shows your people you value what they have to offer now and in the future.

The first step here is to assess the skills in your organisation, ideally at both the team and individual levels. From there, craft a strategy so you have the right skills exactly where and when you need them—and that makes everyone feel valued and committed to the organisation’s aims.

Ready to explore how LHH helps organisations like yours put skills at the heart of your culture and boosts talent retention?

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